Investing

Intel Earnings Drag, but Solid Enough Against PC Trends

Intel Corp. (NASDAQ: INTC) has just reported its first-quarter earnings of 2013. The chip and processor giant report earnings of $12.6 billion, and the net income of $2.0 billion generated earnings of $0.40 per share. Thomson Reuters had estimates of $0.41 EPS and $12.61 billion in revenue.

Intel sees second quarter sales at $12.9 billion plus or minus $500 million with gross margin at 58% plus or minus a couple of percentage points. Estimates were $0.40 EPS and $12.87 billion. What may be some comfort for investors is that Intel is maintaining its 2013 earnings guidance. Intel also said that revenue is unchanged from prior views with low single-digit percentage gains and gross margin of 60 percent plus or minus a few percentage points is unchanged from prior expectations.

Cash generation from operations came to approximately $4.3 billion and the company paid out $1.1 billion in dividends. If you take out the $533 million used to repurchase 25 million shares of stock, that generates an implied price of about $21.32 spent per share.

Today’s earnings will be considered good enough for what is a challenging time. While Intel scored 56% gross margin, that is down 2 points sequentially and down 8 points from a year earlier. To prove how challenging this are look at this: PC client group (processors) were -6.6% sequentially and -6% from a year ago. Even the data center revenue was down by -6.9% sequentially but that was actually up 7.5% from a year ago. The Architecture group sales were down by 3.9% sequentially and down 9% from a year ago. And yet, this is good enough.

Intel shares were up almost 2.5% at $21.91 on Tuesday against a 52-week trading range of $19.23 to $29.27. So far we have the stock up 2% at $22.36 in the after-hours session.

Get Ready To Retire (Sponsored)

Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.

Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.

Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future

Get started right here.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.